Landlord optimism continues to grow

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Confidence in the buy-to-let market continues to grow with almost a quarter of landlords feeling more optimistic about the prospects for their property portfolios.

A positive outlook for rental income and yields has also been reported in the latest Private Rented Sector Trends report from Paragon.

The report, which covers the second quarter of 2011, showed almost a quarter (23%) of landlords feel more optimistic about the prospects for their portfolios.

For the first time in two years, landlords have predicted that they will increase their portfolios in the next year.

On average, landlords expect to have 13.1 residential properties in their portfolios in a year's time, compared to 12.6 properties currently.

Elsewhere within the report, rental income appears to be in rude health, with three out of ten landlords (29%) having increased their income during the second quarter, with the majority enjoying a rise of between 2% and 4%.

Landlords are also more optimistic about the net value of their portfolios, with a growing proportion expecting an increase in value, and fewer forecasting declining values.

Yields were found to remain unchanged at an average of 6.2%, while an improvement in the perception of the availability of buy-to-let mortgage finance was also reported.

According to the latest Moneyfacts.co.uk research, 502 buy-to-let mortgages are currently available on the market, significantly higher than the 272 that were available in August last year.

"Our report emphasises the fact that there is significantly more optimism amongst landlords in the private rented sector and the buy-to-let market, and that looks likely to increase during the coming quarters," said Nigel Terrington, Paragon Group chief executive.

"Landlords are still experiencing high levels of tenant demand which is set to rise further in the coming quarters.

"It is encouraging to see yields remaining at a healthy level, low void periods and general confidence across the sector."